1004
74
FEDERAL REPORTER.
of the note sued upon should be applied o'lly to particular purposes, or that it was to be discounted only under specific circumstances as alleged by the defendants, and if he was aware of, and acted in, the negotiations on the part of the bank for its discount while such negotiations were in progress, then the bank was chargeable with notice of those facts; otherwise not. He said that it was quite competent and proper for Mr. Haines, occupying these relations to both parties to the transaction, to decline to take any part on either side, for the reason that it would be improper for him to do so on account of his position in reference to both the bank and the railway company; and that, if he had done so, no knowledge of any facts which he might have had at that time would affect the rights of the bank; that to charge the bank with responsibility and liability on account of his knowledge he must have been acting at the time in the name and on behalf of the bank as its agent and representative. This rule is cited with approval at secUon 540c, 1 Mol'. Corp., and in Mechem, Ag. p. 560, § 730, where the cases are cited. In a note to Bank v. Irons will be found a collection of cases in support of the rule as stated. Judgment will be for the defendant.
OUR et aI. v. BUOWN et al. (Circuit Court of Appeals, Fifth Circuit. June 9, 1896.) No. 496. 1. ATTORNEY AND Cr,rENT-CONTRACT OF RETATNER.
A firm of attorneys in Columbus, Miss., who had previously represented a firm of bankers holding bonds issued by that city, wrote to the bankers, saying that the city government had decided to contest further payments on the bonds, that a member of the city government had applied to retain them in the litigation, but that they desired first to know what attitude the bondholders desired them to take. The bankers replied that they would see the bondholders as soon as they could, that they had no doubt "of their desiring to have your services," and saying, ';We shall be obliged if you will kindly hold yourselves ready to represent them." Replying to this, the attorneys said, among other things, "'Ve have notified our city authorities that we decline representing them because of your retainer." At the time of these communications the bankers owned none of the bonds, and had no other relation thereto except that they had sold them in open market without indorsement. The actual holders decided to employ other counsel, and the attorneys then brought a suit against the bankers for their fee. Heir! that, as the bankers were without authority to bind the bondholders, there was no contract, and they could not be held personally liable, as self-constituted agents of the bondholders. Orr v. Brown, 16 C. C. A. 197, 69 Fed. 216, distinguished. Under the laws of :M:ississippi, a snit in garnishment against nonresident defendants cannot be maintained, unless it is based upon a valid contract between the parties.
2.
GARNISHMENT.
In Error to the Circuit Court of the United States for the East· ern Division of the Northern District of Mississippi. J. A. Orr, for plaintiffs in error. E. O. Sykes and E. II. Bristow, for defendants in error.
OHR V. BROWN.
1005
Before PARDEE and McCORMICK, Circuit Judges, and SPEER, District Judge. SPEER, District Judge. This is a suit brought by Orr & Orr, citizens of Mississippi, by means of process of attachment, against Brown & Lowndes, citizens of Maryland. On the trial in the court below a verdict for defendants was directed, and Orr & Orr sued out a writ of error. The suit is for a retainer allpged to be due the plaintiffs as counsel under the following circumstances: On September 6, 1892, Messrs. Orr & Orr wrote to Brown & Lowndes the following letter: "Columbus. Miss., September 6th, 18U3. "Brown & Lowndes, P. O. Box 8:i4, Baltimore, l\ld.-Gentlemen: Mr. Dashiell, a member of the city government, has just applied to us, to retain us, if terms were agreeable, to )esist the final payment of the coupons and bonds of the city of Columbus. paid to the Columbus, Fayette and Decatur R. R. Co., the same on which I brought suit for you and for Messrs. \Vilson. Colston & Co. some years ago. Mr. D. informs us that the mayor and aldermen had determined to pay nothing more, and would test the legality of the bonds by suit. Since your Mr. Brown was in Columbus, the writer has severed his connection with the Georgia Pacific, now the Richmond and Danville, and bears a free against it. His junior, Sims, is now the assistant secretary of the interior. You perceive the object of. this letter. ·We do not know who the holders of the bonds are, and we desire to communic'ate with them, so far, at least, to ascertain their wishes as to the attitude they desire us to assume. 'Vill you do us the kindness to confer with them. and notify us if they desire to retain us. With most pleasant recollections of your YIr. Brown, I am, very truly yours, J. A. Orr, for the firm of Orr & On."
On the 11th day of September, 1893, the defendants replied .as follows: "J. "Tilcox Brown. C. D. Lowndes. Frank T. Itedwood. "All Members of Baltimore Stock Exchange. "P. O. Box O:i. Telephone Call 547. "Office of Brown & Lowndes, Bankers aud Brokers, Stock Exchange Building, 20il 10]. German "Baltimore, Sept. 11th, 18:)3. "J. A. Orr, Esq., Columbus, ::iliss.-Dear Sir: Yours of the 6th inst. received, and our :\11'. Brown recalls with pleasure the agreeable re;ations between himself and your firm. It is a surprise to us to learn that the city proposes to resist the payment of the coupons upon its bonds, and we are obliged to you for giving us the information. \Ve will see the as soon as we can, and obtain their expression of wish in the matter, but we entertain no doubt of their desiring to have your services, and we shall be obliged if you will kindly hold yourselves ready to represent them. Please be so kind as to let us know what kind of action the citv proposes to take and when. Thp August coupons were dUly paid, an;l none will be due until February next. This seems a curious time 10 bring suit, if that is what they propose. Our recollection is that you entertained very positive convidions of the legality of the issue, aUlI we also recall the fact tbat, under your management, the citiz('ns with gr,'at unanimity called on the city officials to pay the coupons. Has there been a change of sentiment? "Yours, very truly, Brown & Lownd('s."
On the 14th day of the same month Messrs. Orr & Orr made the following response:
1006
"Gentlemen: Yours of the 11th Inst. received, and we thank you for continued confidence. rVe have notified our city authorities that we decline representing them because of your retainer. They passed a resolution declining to pay any more interest on the bonds. :So they force the alternative on the bondholders to sue, and a suit must be brought on the coupons. You know of the old hostility to the bouds. That has been tanned into life by the panic, anl the chances are now better in the courts than in changing public sentiment, as was done at the time referred to by you. "Very truly. Orr & Orr."
Notwithstanding the facility with which the plaintiffs construed the letter of Brown & Lowndes to be a retainer, the holders of the bonds of the city of Oolumbus referred to in these letters employed other counsel, and Messrs. Orr & Orr sued out process in attachment and caused the same to be served on the city of Oolumbus in order to subject to their claim as attorneys any holdings belonging to the defendants as bondholders that city might have, or any moneys which might be due. The city answered the garnishment to the effect that it was not indebted in any manner to Messrs. Brown & Lowndes, but the defendants came in and answered the suit precisely as if they had been regularly served, and there was a trial formally had in the court below. The cause had beerr previously removed to the circuit court of the United States for the Eastern division of the Northern district of Mississippi, to be held at Aberdeen. The trial was had, a demurrer to the declaration was interposed, and the circuit court sustained the demurrer, upon the ground, as it appears, that the plaintiffs had no cause of action, and that the letters in question did not constitute a contract of retainer. That judgment, on writ of error to this court, was reversed and set aside, and the cause redocketed for a new trial in the circuit court, and thereupon plaintiffs, by way of amendment, changed altogether the nature of their case. The original suit had been brought against Brown & Lowndes, as bondholders and representatives of other holders of bonds of the city of Columbus. It now appearing that at no time since the initiation of the correspondence between Orr & Orr and Brown & Lowndes the latter were bondholders, the plaintiff declared against them as self-constituted agents of the bondholders, and as personally liable. The entire correspondence was put in evidence on the second trial, and upon the construction of its terms the trial judge stated his views to the jury a-s follows: "The testimony which has been submitted to you does not disclose a contract under which the defl.'udants are liahle for the amount sued for, nor for any other amount. The letter of the plaintiffs of the 6th of September, 18D3, was simply a friendly letter, asking a favor or courtesy of the defendants as to who the holders of the bonds were, and as to their action as to the employment of plaintiffs as attorneys. The answer of defendants of the 11th of September, 1893, was II reply in the same spirit of friendship, and It Is apparent in that letter that they did not intend to employ counselor retain plaintiffs. The letter was eVidently misconstrued by the plaintiffs, and if, on this testimon'J', you should find for the plaintiffs, the court would feel it to be its duty to set aside your verdict and grant a new trial to defendants. If plaintiffs have any right of action against these defendants, it was one in tort, sounding in damages, and if they had brought suit for dall1Rges against defendants in Baltimore, they
oRn
V. BROWN.
1007
could probably have recoverE·d; but, this suit being brought in the state court by attachment, plaintiffs must prove a contract in order to recover. T'lle court is of opinion that tbis has not bepn done, and ttle court therc>fore instmcts you to return a verdict for the defendants."
The jury accordingly found for the defendants, and the plaintiffs excepted. 'VVhen this case was first called before this court (GB Ft'(}. 218, 16 C. C. A. 197) it appears that it was averred that the defendants and their principals, most of whom lived in the city of Baltimore, were the owners of bonds of the city of Columbus at the time of the correspondence. In view of that fact, set out in the d!claration and also in the opinion of this court, the three first lett 'rs of the correspondence were held to constitute a contract of be· tween the parties. Kow, the case is entirely changed. It appears, not only that Brown & Lownues were not bondholders, but they were not in privity with any persons who were of the city of Columbus at the time the letters were written. Thef e changes were introduced by the amendments made to the declal'llt on by the plaintiffs themselves, and were established by evidence.:t is readily observable how the amendments make this case ditre 'ent from the cause as originally presented. Brown & Lowndes, as bondholders, under the circumstances, would have been obliged to reply to the third letter of the series, which was written by the plaintiffs. It now appears, however, that their interests were purdy volun· tary, and without consideration. 'rhe bondholders would not have been bound, and the plaintiffs could not have recovered 01 the contract, for there was no contract. 'rhey might have sued in damages, in tort, and recovered quite as much as they could have recovered under the contract if it had been made. But this suit Iaust have been brought at the domicile of the defendants, and could Hot, under the laws of Mississippi. have been brought by attachme:lt or garnishment in that state, for a contract by parties authoriz!d to contract is essential to such a proceeding. It does not appear that Brown & Lowndes were the agents, in any manner, of the bondholders, and only had that interest with relation to the b011ds whieh resulted from the fact that they had sold them in opel market. 'l'hey were, moreover, in no sense indorsers of the bonds. a 1d had no oceasion to incur contractual liability with regard to them. In this view of the ease, we are of the opinion that the judgment directing a verdict for defendant was correct, and it is therefore affirmed.
1008
H
L'EDERAL REPORTER,
et al. v. BOWES et al. (Circuit Court of Appeals, F'ifth Circuit. .April 14, 1896.) Dissenting opinion. For majority opinion see 74 Fed. 657. BOARMAN, District Judge (dissenting). The two opinions already filed in this cause are so extended that I do not care to elnborate my views. I dissent from tile original dedsion of the court, the opinion filed therein and the opinion filed in the application for rehearing. The fact is the in jurisdiction was not discovered by or known to the palties, their counsel, or the judge of the court below. It was only discovered after the cause had been brought to this court by new counsel employed in this city by plaintiff in error, who suggested the matter of jurisdiction to the court, without which, perhaps, the detect would not have been discovereu even in this court. A.MERICAN GR1\,PHOPHONE CO. v. Al\fET. (Circuit Court, N. D. Illinois. April 6, 1806.) Decree, May 4, 1896. For opinion see 74 l'ed. 789. '['his cause ('ame on to be heard on the 20th of February, 1806, on pleadings and proofs, and was argued by counsel both for compla.inant and for the defendant; and the pleadings and proofs, as well as the briefs of'counsel, having been fully considered, and the court being fully advised in the premises, it is hereby ordered, adjudged, and decreed as follows: That the complainant, the American Graphophone Company, a corporation organized lUider the laws of "Vest Virginia, is sole and exclusive owner of letters patent Nos. 341,214 and 341,288, each bearing date of the 4th of May, 1886, and being for ne\v and useful improvements in recording and reproducing speech and other sounds, and an apparatus therefor, as set forth in the bill of complaint; that letters patent No. 341,214 are good and valid so far as their claims are embodied in claims 22 and 24, and so far as they embody claims of a combination, the elements of which are (a) a grooved tablet, or other body, having a sound record formed therein, substantially as described in said letters patent; (b) a reproducer having a rubbing style loosely mounted, so that it is free to move laterally, substantially as described in said letters patent. The ,court further finds that any device which combines the reproducer described in claims 19, 20, 21, 22, or 24 of said patent, with the grooved tablet or other body having a sound record as described in said patent, and especially in claims 22 and 24, is an infringement of complainant's patent No. 341,214. It is further ordered, adjudged, and decreed that the defendant, by the manufacture and sale and use of talking machines marked "Amet's Talking Machine," and identified as "Complainant's Exhibit Defendant's Machine," is an infringer of complainant's patent, and complainant is therefore entitled to recover damages and profits for all infringements by said defendant in the particulars pointed out. Except in the particulars pointed out in this decree, as above stated, the court does not pass upon the validity of the complainant's patents. It is further ordered, adjudged, and decreed that the defendant, Edward H. Amet, his counselors, attorneys, solicitors, trustees, agents, clerks, employes, servants, and workmen, and each and every of them, be, and they are hereby, enjoined for the remainder of the term of the life of said letters patent from further infringing the same, and from manufacturing or causing to be manufactured, selling or causing to be sold, using or .causing to be used, the said or any talking machim's, or any part or parts thereof, so containing or embodying the said invention, and that the complainant recover from the said defendant, as well, the damages sustained in and by reason of said infringements, as the profits, amounts, and savings made and realized by the defendant thereby, together with the costs herein to be taxed, and that the cause be referred to Henry 'V. Bishop, a master in chancery of this court, to take, state, and report the account of damages and profits, under and in ac('{)rdance with this decree. END OF CASES IN VOL.
74.